Monetary Factors that Affect Price Formation in Real Estate: A Nonlinear Approach
Monetary Factors that Affect Price Formation in Real Estate: A Nonlinear Approach

Summary/Abstract: This paper is aimed at examining the relationship between monetary policy and price formation in the mortgage industry. We use the coefficient of mutual information as a measure of “association” to capture such a relationship as a whole, and not necessarily as the addition of contributions of statistical moments and, more important, it is not confined to linear structures or to the linear transformation as turns out to be in econometrics analysis. It is verified the effectiveness of the proposed measure of association according to Renyi’s (1959) properties regarding a functional measure of dependency. The obtained results provide empirical evidence of the existence of an “association” between monetary instruments and the formation of prices in the sector under study.

• Details
• Contents